LEADERS of the Philippine Rural Electric Cooperatives Association (Philreca) and National Association of General Managers of Electric Cooperatives (Nagmec) are perplexed when Energy Secretary Alfonso G. Cusi rejected an offer for additional funding for the sitio electrification budget of the National Electrification Administration (NEA).
“Cusi said he wants to collaborate with the NEA and Napocor, yet he substantially slashes the budget of NEA, the government agency tasked by law to bring electrification to the countryside. Remote sitios and barangays will benefit from government funds,” Nagmec President Sergio C. Dagooc said in a statement. “Bakit ayaw niyang tanggapin ang libreng pondo ng gobyerno [Why won’t he accept government funds]?”
NEA’s budget had been slashed by P654 million, from P1.817 billion in 2018 to P1.163 billion in 2019.
“Cusi obviously wants to cripple the NEA and its rural electrification efforts by reducing its budget. When that happens, it would provide justification to open the door for private business interests to enter,” Dagooc said.
He added Cusi’s “biases are already becoming obvious.”
“He doesn’t support the decades-long electrification program based on people’s orgs at the grassroots level. He wants for-profit private sector entities to take over rural electrification,” Dagooc said. “The big questions are why, and what’s in it for him?”
NEA currently supervises 121 electric cooperatives providing electricity services to 12.447 million households nationwide as of June 30, 2018.
Philreca President Presley de Jesus explained that the privatization scheme Cusi intends to implement was a red herring; one that would “create more problems than solutions.”
“When you allow for-profit ventures to enter rural electrification, two things will happen,” de Jesus explained. “First, electricity prices will rise because these private sector PDUs [power distribution utilities] will want to recover every centavo they invest so they can make a profit. To do this, they will recoup their funds from our rural electricity consumers as pass-on charges like the Stranded Costs in our electricity bills.”
He added that “private PDUs will not engage in public service missionary electrification programs, meaning they will not go to isolated places or areas of conflict, calamity or disaster danger zones where the poorest of the poor live and have no financial capacity to pay, and where there are no jobs or livelihood—because these are very remote and far from the main distribution arteries.”
“There’s just no economic viability for these profit-based entities to operate in these areas,” de Jesus said. “Instead, these private investors will choose areas with sufficient paying capacity, the very same areas where ECs already operate. There will be redundancies, overlaps.”